Lower oil prices helped push Carnival's second quarter earnings past analysts' estimates. But other numbers it posted were far less festive. The embattled cruise line operator's revenues fell two percent. And it signaled rough waters ahead.
It warned that its advance bookings for the remainder of this fiscal year are running behind last year's pace, and it's commanding lower prices to boot. And it expects its costs to be as much as 4-1/2 percent higher this year.
CEO Micky Arison said in a statement, "... we remain focused on reducing our fuel dependence. By year end, we will achieve a 23 percent cumulative reduction in fuel consumption since 2005 ...."
Arison will be stepping down as CEO but will remain Chairman.
Demand for cruises remains weak amid the economic recovery. But the world's largest cruise operator, which runs the Carnival, Holland America and Costa brands, has had a series of well-publicized mishaps this spring.
Susquehanna Financial analyst Rachael Rothman notes the fall out in pricing. "Carnival's pricing trends weakened noticeably post the Triumph fire and continued to weaken after Carnival had operational problems on the Legend and Dream in March. Royal's pricing has been much more resilient than Carnival ... and pricing has remained largely unchanged."
She has lowered her price target on the stock, which has had a turbulent ride the past two years. It is down 10 percent so far this year.

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